Consumer watchdog branches out

From the coverage of the Consumer Financial Protection Bureau, it might look like the agency is bogged down in an endless series of fights over who should run it.

But while Washington focuses on the confirmation battle of Richard Cordray, the watchdog agency is quietly moving right along — branching out into regulating new parts of the financial sector, from inaccurate credit scores, to inflexible student loan repayment plans, to deceptive marketing and payday lenders that can trap consumers with low income in a cycle of ever-growing debt.

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The agency already has unveiled a series of seven mortgage rules in January, mandated by the Dodd-Frank financial reform law that created the agency, including one that requires lenders to make sure customers can actually repay their mortgages.

And while the agency has avoided any major public flaps and hasn’t given critics much fodder, some observers say it is facing a more day-to-day issue: growing pains.

The bureau is starting to face charges that it’s sending out financial examiners who are disorganized, giving mixed messages to industries that could face new regulation and not being clear about what the examiners expect — the kinds of problems that could hamper its goals.

The U.S. Chamber of Commerce has complained, for example, that its members have found the examinations to be “confusing, unnecessarily duplicative, inconsistent and open-ended.” That issue could create more tension in the coming months if it’s not fixed, since several of the next consumer issues on its agenda are likely to be handled through examinations, not new regulations.

There’s also a growing demand, shared by Republicans and some of the leading financial groups, for more specifics about what’s next for the bureau and what standards it plans to impose on the financial community.

“One of the oversight problems is getting a handle on what they’re actually doing,” said Rep. Patrick McHenry (R-N.C.), chairman of the House Financial Services Oversight and Investigations Subcommittee.

The reality, though, is that there isn’t likely to be a lot of detail anytime soon — because the bureau is in more of a studying phase at this time, hitting “pause” on the regulatory button, now that it has finished issuing the mortgage rules.

In the eyes of some industry groups, it’s almost as though the bureau, having cleared out much of the regulatory work that was mandated by Dodd-Frank, is taking a deep breath and looking around for what to do next.

“It’s fairly difficult to figure out exactly where the CFPB is headed,” said Jess Sharp, executive director of the U.S. Chamber of Commerce Center for Capital Markets Competitiveness. The bureau is clearly exploring a lot of subjects, he said, like prepaid cards and overdraft protection, but “they’re either not tipping their hand or they’re not sure what else they’re doing in 2013.”

In a series of interviews with POLITICO, however, bureau officials pulled back the curtain. Working in three offices scattered around Washington — including a modern, barely-lived-in office building a block from the White House — they talked about their plans for monitoring financial institutions to prevent problems, better repayment terms for the trillion-dollar student loan market and educational efforts like new partnerships to prevent financial exploitation of the elderly.